ECB Governing Council member Mario Centeno advocates to start cutting interest rates “sooner and more gradually”, as there are a lot of evidence that inflation is falling sustainably towards 2% target. He also argued that ECB doesn’t need to wait for May wage data before acting.
“We can react later and more strongly, or sooner and more gradually. I am completely in favour of gradualism scenarios, because we have to give economic agents time to adapt to our decisions,” he said in a Reuters interview.
This perspective underscores his preference for a steady, sustainable reduction in interest rates, proposing 25 basis-point steps as “a good metric”.
Centeno’s stance also diverges from some ECB policymakers who propose waiting for Q1 wage data in May, to assess the potential second round effects on inflation. He argues that ECB’s decisions should not be exclusively hinged on wage data. “Data-dependent is not wage-data dependent…we don’t need to wait for May wage data to get an idea about the inflation trajectory,” Centeno remarked.
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